“ The government is making great efforts for better financial inclusion in Indonesia so that even low-income households are given the opportunity to receive financial support from banks as well as insurance companies. ”
The company was established by state-owned bank, Bank BTN with our main business in insuring mortgage loans for properties in Indonesia. We specifically covered the risks associated with mortgage loans specifically in relations to damage to properties from fires, earthquakes and flooding, among others; this gave homeowners the peace of mind that their assets were insured. Our ability to offer long-term insurance — up to 25 years— allowed us to stay ahead of our competitors who often can only provide short-term plans. Through this strategy, we have become a trusted player within Indonesia’s insurance industry, thus why a large number of banks utilise our services since we can assist in achieving high profits for them.
This is still part of our business portfolio but we have since diversified and banks now only cover 30% of our total insurance portfolio. The majority of our products are for retail insurance that covers other rapidly growing market segments such as the automotive industry. We believe that the potential of retail insurance is highly promising going forward as Indonesia’s insurance sector develops.
We are currently aiming to improve upon our agencies and our cooperation with banks as we believe this can provide us with the means to further expand our retail insurance portfolio. The competition in other areas such as corporate insurance is too high despite the premiums being very lucrative. Our focus is for our retail insurance portfolio which we believe can provide us with a much more sustainable revenue stream compared to other channels.
As such, we aim to increase our market share in the coming years as the industry is still relatively untapped. We currently have a vast network of 600 agencies which we aim to double within two years as a means to better expand our products and services in retail insurance. Through our longstanding experience, we can now cater the specific needs of our customers for retail insurance which is mainly being driven by Indonesia’s large middle-class.
Our strategy is to enhance the skills of our agents who are our front liners in the field. Our agencies are responsible for educating the public on our insurance policies as well as on the importance of having insurance. This is not easy as Indonesia is a large country and now knowledge on insurance and the financial system has not penetrated the masses yet. This is why we are also utilising of digital technology to educate and present our products and services to an increasingly tech-savvy population.
Going forward, we see the greatest growth potential from the country’s middle-class segment considering their rising purchasing power which has allowed them to gain a greater interest for insurance. We are also trying to establish new products that cover disasters for low-income demographics through micro-insurance products.
The government is making great efforts for better financial inclusion in Indonesia so that even low-income households are given the opportunity to receive financial support from banks as well as insurance companies. We have been working closely with the OJK to develop micro-insurance products in addition to leasing and loans for the low-income demographic. We are therefore exploring potential collaborations with non-banking finance institutions and other multi-finance companies to distribute our products to a much larger market segment. The government is also encouraging us to achieve this in the shortest amount of time, however our biggest challenge remains in the purchasing power of potential customers despite micro-insurance product selling for 10,000 IDR at the lowest price. Nevertheless, we do have an efficient system in place as well as effective selling points so therefore our prospective for the future looks bright.
Our company is mainly concentrated on the domestic market in Indonesia since it is the largest in ASEAN. We do see potential in areas such as international corporate risks, as well as life insurance in ASEAN countries but for general insurance, it will be much more difficult since we do not know what level of risks entering these markets will be without initiating due diligence market research.
We are very open to working with international investors for partnerships and capital investment as we aim to expand our market share in Indonesia. We want to work with partners that have a long-term vision and see the country’s potential as a relatively untapped insurance market. Furthermore, we also seek partners that can help advance our retail insurance business.
We are one of the largest insurance providers of mortgages in Indonesia. Through our longstanding experience and expertise, we have become a trusted to a large number of financial institutions thus showcasing our commitment to forming strategic partnerships in order to provide the best products and services.